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Spain’s Real Crisis Is a Leadership Void, Analysts Say Spain’s Real Crisis Is a Leadership Void, Analysts Say
(2 days later)
MADRID — The sense of scandal surrounding Prime Minister Mariano Rajoy has crested yet again, after another week of allegations and denials in which the former treasurer of his Popular Party continued to drip-feed the media glimpses of ledgers that appear to show that Spain’s leadership enriched itself for years with a secret slush fund. MADRID — The sense of scandal surrounding Prime Minister Mariano Rajoy has crested yet again, after another week of allegations and denials in which the former treasurer of his Popular Party continued to drip-feed the news media glimpses of ledgers that appear to show that Spain’s leadership enriched itself for years from a secret slush fund.
But while the charge may be simple enough, the case is not. Having previously withheld information from the courts about secret Swiss accounts, the former treasurer, Luis Bárcenas, who now sits in prison, seems less than fully credible, and the courts incapable of digging to the bottom on the matter with real speed. But while the accusation may be simple enough, the case is not. The former treasurer, Luis Bárcenas, seems less than fully credible: he has been jailed as a flight risk, having previously withheld information from the courts about secret Swiss accounts. Mr. Rajoy may well stonewall, seeking to string out the case beyond the end of his scheduled mandate in 2015 and the next election. The overburdened courts appear incapable of digging to the bottom on the matter with real speed.
The result is less a crisis for Mr. Rajoy — though he is certainly damaged, polls show — than one for Spain, its national morale and the credibility of its institutions, with all the risk that the steady drumbeat of allegations will deny recession-hit Spain strong leadership and distract the government from pressing economic concerns as the scandal unspools for years, analysts say. For the moment, the result is less a crisis for Mr. Rajoy — though he is certainly damaged — than one for Spain, its national morale and the credibility of its institutions, carrying the risk that the steady drumbeat of allegations will deny recession-hit Spain strong leadership and distract the government from pressing economic concerns as the scandal unspools, analysts say, possibly for years.
In fact, Mr. Rajoy’s best defense may be to stonewall and string out the corruption case beyond the end of his scheduled mandate in 2015 and the next election. Given Spain’s overburdened courts, that should not be hard to do. However, the stakes in the case are rising, and some senior party officials have begun seeking to isolate and disparage Mr. Bárcenas — raising the possibility that he might retaliate by sharing more of his knowledge of the party’s inner workings.
“Rajoy is the ultimate resistance fighter and he has clearly decided that time will play in his government’s favor,” said José Ignacio Torreblanca, a political columnist and head of the Spanish office of the European Council on Foreign Relations, a research group. Mr. Bárcenas, who is being investigated on suspicion of tax fraud and other financial crimes, has been held in custody outside Madrid since June. With each court appearance — his next is Monday — speculation mounts that he will turn on his former party colleagues. After visiting Mr. Bárcenas last week, Miguel Duran, a lawyer and a friend, told RAC1 radio that Mr. Bárcenas had told him “interesting things.”
Still, Mr. Torreblanca suggested that Mr. Rajoy was making “a big mistake” if he resorted to stalling tactics in an attempt to keep political pressure at a minimum. “He has enough information to make the government fall,” Mr. Duran said.
“A prime minister should not only ask people to trust him but instead present a credible story about exactly what happened when faced with such accusations,” Mr. Torreblanca said. By Thursday, Mr. Bárcenas was being called “a delinquent” by Alfonso Alonso, the party’s parliamentary spokesman, who also described him as one “for whom lying has become a way of life.” But Mr. Alonso acknowledged that “there has been a corruption ring, which is what we want the judiciary to clarify.”
This week, however, the Popular Party rejected a call from opposition parties for Mr. Rajoy to appear in Parliament and explain exactly how the party’s finances had been managed by Mr. Bárcenas. Meanwhile, prosecutors started naming senior Popular Party officials whom they want to appear as witnesses in the case, led by María Dolores de Cospedal, the secretary general of the party. In February, in contrast, when Mr. Rajoy made a weekend television address to deny the existence of a slush fund, he made no mention of Mr. Bárcenas and the Swiss money, instead defending the fiscal rectitude of all his party colleagues. “All our tax contributions have been made within the strictest legality over all these years,” Mr. Rajoy said then.
Mr. Bárcenas was first subpoenaed in 2009, as part of what then appeared to be a mundane graft investigation into whether a group of businessmen had bribes to receive contracts from conservative mayors and regional politicians. He denied at the time ever having had money in Switzerland. Mr. Alonso’s portrayal of Mr. Bárcenas was “a major change in the party discourse and some form of reality check,” said José María de Areilza, a law professor at the Esade business school.
Since January, investigators have unearthed at least €47 million, or $61.4 million, that he allegedly stashed offshore, in Switzerland but also possibly in the United States and other countries. Mr. Bárcenas is next scheduled in court on Monday, and with each appearance speculation mounts that he will turn on his former party colleagues, as they turn on him. Mr. Bárcenas left his post in 2009, reportedly with a trove of documents, after being drawn into what appeared to be a mundane graft investigation. The issue was whether mayors and other regional politicians from the Popular Party had taken bribes from a conglomerate led by an entrepreneur and developer, Francisco Correa, in exchange for no-bid contracts. Mr. Bárcenas at the time denied ever having had money in Switzerland.
Mr. Bárcenas reportedly left his job as treasurer in 2009 with a trove of documents. This week, the newspaper El Mundo published ledgers that it claimed were the party’s parallel financial accounts, mirroring allegations made in late January by another Spanish paper, El País. However, since January, investigators have unearthed at least 47 million euros, or $61.4 million, that they say he stashed offshore, in Switzerland but also possibly in other countries.
Mr. Bárcenas is being held in a prison outside Madrid since a court judged him to be a flight risk in June. After visiting his friend on Monday, Miguel Duran, a lawyer, told RAC1 radio that Mr. Bárcenas had told him “interesting things.” The financial crimes unit of the Spanish police released a report in May in which it said that it had identified 19 of the fund’s corporate donors, which had received public contracts worth more than $15 billion from conservative politicians over a decade.
“He has enough information to make the government fall,” Mr. Duran said ominously. Last week, the newspaper El Mundo published ledgers it said were parallel financial accounts kept by the Popular Party. The information mirrored allegations made in late January by another Spanish paper, El País, which reported that the ledgers showed secret payments to Mr. Rajoy and other party members for nearly 20 years, ending in 2008, when Spain’s construction boom ended.
Mr. Rajoy and other senior party officials have denied wrongdoing, as has Mr. Bárcenas. Increasingly the scandal boils down to their word against his. Senior party officials have now sought to isolate and even disparage their former colleague, at the risk that Mr. Bárcenas will become even looser with his years of accumulated knowledge of the inner workings of the Popular Party. Mr. Rajoy and other party officials have denied wrongdoing, as has Mr. Bárcenas.
By Thursday, Mr. Bárcenas was being called “a delinquent” by Alfonso Alonso, the party’s parliamentary spokesman, “for whom lying has become a way of life.” At the same time, Mr. Alonso acknowledged that “there has been a corruption ring, which is what we want the judiciary to clarify.” With a bulletproof majority in Parliament and elections not due until 2015, Mr. Rajoy is in little immediate danger of being nudged from power. But the persistent questions about the fund have pushed him and his inner circle toward blanket denials that leave them little room to maneuver if Mr. Bárcenas divulges more damning information or the investigation otherwise deepens.
In February, in contrast, when Mr. Rajoy made a weekend television address to deny the existence of a slush fund, he made no specific mention of Mr. Bárcenas and his Swiss money and instead defended the fiscal rectitude of all his party colleagues. “All our tax contributions have been made within the strictest legality over all these years,” Mr. Rajoy said at the time. Proving any illegal party funding is likely to be an uphill struggle, given the murkiness of rules governing the financing of Spanish parties — something that Mr. Rajoy’s government is in the process of tightening. But the questions have already helped sink Mr. Rajoy’s popularity to record lows. His government has also faced mass demonstrations, as citizens blame its austerity push for their worsening conditions and a record unemployment rate of 27 percent.
Mr. Alonso’s portrayal of Mr. Bárcenas was “a major change in the party discourse and some form of reality check,” said José María de Areilza, a professor of law at the Esade business school in Madrid. It also showed how quickly the stakes in the case have mounted, he said. Only 23 percent of respondents would now vote for the Popular Party, according to a telephone survey by Metroscopia, a pollster, and published by El País this month. That is near the lowest level since Mr. Rajoy came to power in November 2011. Meanwhile, 86 percent of those surveyed said that they did not trust Mr. Rajoy. The survey was based on interviews with 1,000 adults and has a margin of sampling error of plus or minus 3 percentage points.
With a bullet-proof majority in Parliament and elections not due until 2015, Mr. Rajoy is in little danger of being nudged from power. But the persistent drumbeat of allegations has pushed him and his inner circle toward blanket denials that leave them little room for maneuver if Mr. Barcenas’s allegations eventually stand up. Still, the Socialists and other parties continue to trail the Popular Party, according to Metroscopia’s latest poll, showing the extent and depth of the discontent and mistrust in Spain, as politicians, the monarchy and almost every other institution have become entangled in the web of fraud investigations, many related to building contracts awarded before the bursting of the country’s construction bubble.
Underlining the severity of the slush fund allegations against the Popular Party, the financial crimes unit of the Spanish police released in May a report in which it said that it had identified 19 of the fund’s corporate donors, which received more than €12 billion worth of public contracts from conservative politicians over a decade. On Sunday, the Socialist party urged Mr. Rajoy to resign, after El Mundo released copies of text messages it said were exchanged by Mr. Rajoy and Mr. Bárcenas, suggesting the prime minister had shown solidarity with his ex-treasurer even after the discovery of the Swiss account.
Proving any illegal party funding scheme is likely to be an uphill struggle given the murkiness of the rules governing the financing of Spanish parties — something that Mr. Rajoy’s government is in the process of tightening. But the questions swirling around the party’s finances have already helped sink Mr. Rajoy’s popularity to record lows. Mr. Rajoy’s government has also faced mass demonstrations, as citizens blame its austerity push for their worsening conditions and a record unemployment rate of 27 percent. Last week, the Popular Party rejected a call from opposition parties for Mr. Rajoy to appear in Parliament and explain exactly how the party’s finances had been managed. Meanwhile, prosecutors started naming senior party officials they want to appear as witnesses.
Only 23 percent of respondents would now vote for the Popular Party, according to a survey by Metroscopia, a pollster, and published by El País last Sunday, hovering near the lowest since Mr. Rajoy came to power in November 2011. Meanwhile, 86 percent of those surveyed said that they did not trust Mr. Rajoy, according to Metroscopia. “Rajoy is the ultimate resistance fighter, and he has clearly decided that time will play in his government’s favor,” said José Ignacio Torreblanca, a political columnist and head of the Spanish office of the European Council on Foreign Relations, a research group. But he said stalling could be “a big mistake.”
Still, the Socialists and other parties continue to trail the Popular Party, according to Metroscopia’s latest poll, showing the extent and depth of the discontent and mistrust in Spain, as politicians, the monarchy and almost every other institution have become entangled in the web of fraud investigations, many of them related to building contracts awarded before the bursting of Spain’s construction bubble in 2008. “A prime minister should not only ask people to trust him,” Mr. Torreblanca said, “but instead present a credible story about exactly what happened when faced with such accusations.”